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Technology in Managemnt
Technology in Managemnt
1965
Recommended Citation
Adams, Robert Sexton, "The Effects of Information Technology on Management and Organization." (1965). LSU Historical
Dissertations and Theses. 1062.
https://digitalcommons.lsu.edu/gradschool_disstheses/1062
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A Dissertation
in
by
Robert Sexton Adams
B.B.A., North Texas State University, 195$
M.B.A., North Texas State University, 1961
August, 1965
ACKNOWLEDGMENT
CHAPTER PAGE
ACKNOWLEDGMENT.......................... ii
LIST OF F I G U R E S ............... ix
ABSTRACT................................ x
INTRODUCTION............................ xiii
A s s u m p t i o n s .......................... xvii
L i m i t a t i o n s ......................... xviii
Plan of Presentation................. xx
Data p r o c e s s i n g ................. 3
Electronic computers............ 3
Management science................. .. . 7
Linear programming.............. £
iii
CHAPTER PAGE
Game t h e o r y ...................... 11
Simulation.......................... 11
Organization of E D P ................ 17
Business simulation . . . . . . . . . . 41
Gasoline b l e n d i n g ............... 42
Catalytic cracking............... 50
Economic model.................... 52
iv
CHAPTER PAGE
Engineering design................. 55
S u m m a r y ................................ 56
Improved decisions................... 56
The P r e d i c t i o n s ........................ 59
Organizational Impacts................. 63
Organizational structures . . . . . . . 63
Reorganizations ........................ 64
Departmental changes................. 67
department........................ 67
Other c h a n g e s ..................... $4
Role playing........................ 90
v
CHAPTER PAGE
of information technology............... 94
Organizational principles................. 97
P l a n n i n g ................................. Ill
Controlling.............................. 114
P l a n n i n g ................................. 120
Controlling..................... 127
J o b s ....................................... 130
vi
CHAPTER PAGE
p o s i t i o n s ........................ 141
technology........................ 14$
making............................... 151
vii
CHAPTER PAGE
P u r p o s e . ...................................... 157
B I B L I O G R A P H Y .......................................163
V I T A ............................................ 171
viii
LIST OF FIGURES
FIGURE PAGE
1. An Electronic-Data-Processing System.......... 5
3. Organization Chart........................ 65
Department................................... 75
Department........................ .... 81
Department................................... 85
ix
ABSTRACT
revolutionised.
xi
levels. These improvements furnish a more precise base upon
company.
INTRODUCTION
business managers.
xiii
mathematical problems that required thousands of man-hours to
figuring payrolls.
eral industries that have made the most progress with infor
xv
with key management personnel provided the primary source of
xvi
Background of the Company
remain anonymous.
Assumptions
O
The name of the company has been disguised.
xvii
this company can be used as an objective criterion by which
Limitations
xviii
executives to cross-check the accuracy of individual
interviews.
Definition of Terms
•'information technology."^
xix
and department heads. Supervisory management includes those
Plan of Presentation
meaningful.
effects on organization.
xx
middle, and supervisory management are emphasized, especially
Chapter V.
CHAPTER I
computers.
2
Richard A. Johnson, et al«, The Theory and Management
of Systems (New York: McGraw^HilT Book Company, Inc., 1963),
p. 206.
electronic, digital data-processing m a c h i n e . T h e elec
more accurately with the computer than with any other equip
that is, there are five basic elements, including input, out
^Goodman, l o c . cit.
5
Control
Oper Storage
ations
Input Output
side and the same elements for the output side, with the ad
management report.
evident in industry.
Management Science
of understanding.
niques.
explored.
d
C. West Churchman, Russell L. Ackoff, and E. Leonard
Arnoff, Introduction to Operations Research (New York:
John Wiley and Sons, "Inc., 1957), p« 1$.
9
determination of:
price
outlets
Johnson, o p . c it.. p. 2 2 1 .
10
is most useful.
thesis testing.
decision maker.
include:
11
it is finite or infinite
"patient"- or not
pattern
not unusual.
Simulation
19
Churchman, Ackoff, and Arnoff, op. cit., p. 519.
12
13
Johnson, ojd. cit. . p. 227 o
be discussed.
CHAPTER II
AT FETRO-CHEM REFINERY
constantly.
14
15
was located in, and operated by, the Accounting Division and
on IBM equipment.^
n
^Statement made during an interview with the Data
Processing Manager, August 17, 1964#
16
computers. Orders were placed for two IBM 650's and one IBM
2Ibid.
17
decided that the computers could provide the speed and flex
page.
Organization of EDP3
separate department.
on the IBM 6$0 and 705. As time went by, it became evident
PETRO-CHEM REFINERY
PETRO-CHEM REFINERY
(Continued)
Figure 2
Processing.
both divisions was carried out by the foremen, who made out
time sheets at the end of each day giving the name and number
time sheets were sent to the payroll section, and this infor
mation was placed on punched cards for input into the payroll
system.
now prepares its own new list each day. Every day each
The time sheets also provide the basis for preparing the next
job requirements.
struction, and one for the machine shop. Each division was
people not only to their job assignments for that day, but
also for the following day, so that the supervisor can plan
worked per skill. Each job is then charged for its skill
requirements.
work schedule sheet for each area supervisor, and also reports
sheets.
has cut its labor force sharply in the past several years.
There are now approximately 1,500 wage earners and about 200
less than 4 ,0 0 0 .
can be produced.
changing technology.
lities.
daily all material receipts and all stock issues for each
for each item, the machine can be made to signal when the
stock •
made and order points and economic order quantities are set
ordered.
point.
purchase orders for items for which they are not prepared to
order date and a due date for each open order, and guided by
promise, and backward from the due date in asking "Will you
the system. The computer then compares the promised date with
Department action.
are the next steps in the program and are now accomplished by
status" until the material and the invoice have been received
and all the built-in checks of the system have been satisfied.
not agree.
32
cash discount, and pay terms with prices and terms previously
vendor.
invoice does not agree with the data which has been placed in
memory.
stock obsolescence,
run twice a year printing out a list of all items that have
used, and returned. The next time the unit is closed down
tapes and are up-dated on the 7074. This tape serves as one
additional reports have been added. Not only has this pro
the IBM 7074, customer data and shipping data are processed
9 Ibid. 10 Ibid.
the department.
vessels.
been a formidable job and may involve over 150 measured var
reports.
first processed on the IBM 705 and are now done on the 7074.
be known in order for daily planning for the use of the oil.
Formerly it took two or three men all day to take the tank
as this could upset planning efforts for days. Now oil in
check carefully.
Business Simulation
are not new, their use, until recently, has been seriously
junction with the computer have been used with varying degrees
many changes occurring over time that affect either the input
the gasoline.
blend.
data processing).
maximize profit.
plan. These plans were then compared and a final plan de
involved.
this is first to work out a feasible plan - that is, one that
are then made to improve upon this plan. However, the fac
all the way through to make sure that they do not cover a
greatly.
certain that some better plan does not exist unless they ex
statement.
refinery.
have long been used by oil companies, but because the cal
linear equation. The catalyst holdup rate and total feed rate
maximized.
Economic m odel.
1*5
J The Long Range Economic and Budget
available.
early in the Spring when the Head of the Economic and Budget
cash flow.
market for crude oil. The principal advantage for this par
scale operating units, and the time and cost involved limits
Summary
Department.
blending decisions can be seen from the fact that the Petro-
Improved Decisions
decisions. They are better in the sense that they are more
managerial organization.
chapter.
The Predictions
59
60
information technology:
Organizational Impacts
Corporate Changes
the corporate level since World War II. With few exceptions,
place. That is, the organization has evolved into one where
64
V l C f P R E S ID E N T
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A D MI N I S TR A T I VE SECT. ANO
a s s is t a n t STAFF ASST.
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ACCOUNTING LAN ASST. GCM L . MGR,
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LA BO RA TOR IE S
5 T C M D C » * P pi 1C
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TfttUiAT I N G -
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AND
TERM I HALS
CRAC * • R C irlu.
A A iC O n D l
A IN I F . Kt|*T£UMGC
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CO«STluC T i m
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MAS 04
PETROLEUM PRODUCTS a d m in is t r a t iv e
TECHNICAL AND
PETROLEUM OPERATIONS MEDICAL EMPLOYEE RELATIONS PURCHASING I
COORDINATION
MEDICAL DIRECTOR HEAD
HEAD HEAD HEAD
ass istant
HEAD
ASSISTANTS PLANT PROTECTION
HEAD OIL MOVEMENT ' AND UTILITIES
ASSISTANTS ASSISTANTS
HEAD COORDINATORS OF •
HEAD
• L o n & Pollution Con**!
ASSISTANT
Figure
CRUDE 1 PETROLEUM
COORDINATION___
STORES
HEAD
HEAD
Petro-Chem Refinery 66
VICE-PRESIDENT I DENERRL MANABEB
Organization, 1964
ASSISTANT GENERAL M N AQ E R
a d m in is t r a t iv e CHEMICAL PROpUCTS
manager MANAGER
ASSISTANTS ASSISTANT
1 "
SENIOR BUYER
ALCOHOL CHEMICALS TECHNICAL
H|AD HEAD
RESEARCH LABS.
ASSISTANT
ASSISTANT
DIRECTOR
SEIIOR STAFF ENGINEER
MSAD
HEAD
OFFICE, MATERIALS
RECEIVING t SHIPPING SENIOR STAFF ENGINEER
HEAD
following section.
Departmental Changes
processing of the same data that had been prepared in the past.
officer, and most of the cost elements and savings were within
to other departments.
Processing.
refinery.
company.
approximately 150.
one man. Three years later the two section foremen’s posi
Head
Head
Assistant Head
department.
assistant.
processes.
and (2) the major plant expansion program which was in ef
EDPM system. The assistant buyers were added for this reason
these men were transferred since their work was completed and
Head
Assistant Head
X I
Buyer Buyer Buyer Buyer
Asst. Asst. Asst. Asst.
visory task was easier and there was no longer a need for two
be seen in Figure 6.
Head
c ; . .
upervisorv Buyer
Operations] _ Rates
supervisor 1 Supervisor
Buyer Buyer
_L
Chemical
Products ir
A]
j Buyei Buyer
roieur
petroleum
ro aucts Railroad
Buyer Buyer
I 1
'Incoming Trucks
Buyer Buyer Products
department.
computer.
this department .
operations sections.
Oil Movement Department Prior to
Organization Change
Head
Section Foreman Section Foreman Section Foreman Section Foreman ection Foreman
partment.
information.
Section Foreman Section Foreman Section Foreman Section Foreman Section Foreman
. 1-------------------
CXJ.
\J1
&6
change.
37
company.
iates. Each develops its own operating and long range plans,
the refinery.
12Ibid.
90
personnel.
"The widely used ’Line and Staff* principle grew out of the
14Ibid., p. 10B.
l^Ibid., p. 56.
92
staff capacity.
is considered in turn.
one. On the other hand, the Managers of the Stores and Oil
directly to them.
level. For the past ten years there has been a steady decrease
surveyed said that work teams had been reduced in size, and
75 per cent said that the span of supervision had been reduced
1$
as a result of automation.
actually vegetated over the past few years, there have been
adjustments.
naturally.
their work.
Organizational Principles
^ S e e pp. 61-62
96
sophy.
mation technology.
No Structural Revolution
and principles, have been minor ones and have evolved slowly.
The Predictions
literature:
101
102
agers. . .’’3
2 Ibid., p. 42.
^Strauss, ojd. c i t .. p.
how routine, or how obvious they are when they arise. On one
contains decisions which are not routine but are complex de
has not been the same on all levels of management. The re
mation."^
when necessary.
significant to state again that there has not been any major
of the manager.
later section.
lA
x o John Dearden, op. c i t .. p. 43*
113
who are on the border line between upper and middle management,
their consideration.
ment to meet this demand into the capital budget. These pro
Products Manager will soon have the means for more centralized
best
ment personnel are now made through the use of the computer.
Movement Department.
the available data and the decision which was made through
done.
relationships.
good plans. But in some instances the "best" plan would not
more alternatives.
over-hauls.
process.
the refinery.
both manpower and material. The period of time that labor and
puter.
curacy did not occur at the final report level, but at the
level where the final reports were prepared. The effort re
quired to find and correct the errors before the final reports
change, the very nature and role of the managerial job changes
Top Management
jobs.
management.
Supervisory Management
to employees.
validity.
Middle Management
occupants.
job content. On one hand, there are some tasks that are
ttfeel more satisfied with their work than they did before.”
and enables them to do a better job than they did before the
13#
2$
introduction of the computer. For example, the job of the
products.
upon the quality of the company’s interium oil can. The re
requirements.
o tj-
John A. Beckett, as cited in ’’Electronic W i z a r d s ’
.
Some Computer Users Encounter Serious Problems,’’ The Wall
Street Journal (July 9, 1 9 6 4 ) j P* 6.
v
139
situations.
quirements.
Elimination of Personnel
assumption was sometimes made that the manager’s job had in
of this chapter.
occurred.
141
number.
him:
lowing section.
are also those who are responsible for initiating the change
been thinned somewhat over the past few years, partially due
partments.
the system.
cuse for not attending was that the person was "too busy" or
attention.
improvedo
management * ^
lower management jobs and that they can not as yet be made
36
at higher levels. Even the expansion of automatic treat
a revolutionary impact.
mation system (the EDPM Master Plan) may possibly cause fur
trolling.
middle and lower levels - the areas where the computer solu
cesses.
definition.
immediate impact over the next five years, will not be upon
i
153
on Middle Management
have not been affected, except that top management has a more
SUMMARY OF CONCLUSIONS
Purpose
Organizational Changes
157
15$
revolutionary.
controlling are of such a long run nature that the very at
operations.
160
BOOKS
163
164
NEWSPAPERS
171
EXAMINATION A N D THESIS REPORT
Approved:
EXAMINING COMMITTEE:
Date of Examination: